Determine the depreciation and book value

Assignment Help Managerial Economics
Reference no: EM13508911

BTech, LLC, a startup biotechnology company is preparing alternative proposals for producing a new product in an existing building. In the proposal being considered in this question, the building will be renovated and equipped in one year. Production then will start in year 1. MACRS depreciation will be used with depreciation deductions starting in year 1. The renovation will require the purchase and installation of two types of assets labeled "Group 5" and "Group 7" because they can be depreciated using 5 year and 7 year MARCS rates respectively. The Group 5 assets will costs $300,000 and the Group 7 assets will cost $800,000. Table 9.3 on page 448 contains the depreciation rates. The planning time horizon is six years after renovation.

a Determine the depreciation and book value for each of the two investment groups for each year.

b Determine the gain/loss for tax purposes If the Group 5 and Group 7 assets are sold at the end of the planning period for a combined $500,000.

Reference no: EM13508911

Questions Cloud

Estimate the velocity of the target ball after the collision : A softball of mass 0.220 kg that is moving with a speed of 5.5 m/s collides head-on and elastically with another ball initially at rest. estimate the velocity of the target ball after the collision
What is the market value of the npvgo : Looking on yahoo finance I observe a PE ratio of 15. I believe the correct discount rate is 10 percent. What is the market value of the NPVGO?
What are the four different result types : What are the four different result types that can be returned from a subquery? For each type, explain what it is and when it is used.
React to race based on gender discrimination : Collect real time data using a questionnaire to analyze how people perceive or react to race based on gender discrimination. .This can be about a specific policy, like affirmative action or early retirement, or in a specific setting (discriminatio..
Determine the depreciation and book value : Determine the gain/loss for tax purposes If the Group 5 and Group 7 assets are sold at the end of the planning period for a combined $500,000.
Determine depreciation expense for year one : A pressurized spray painter was purchased on April 1 of the fiscal year for $3,900. It has a useful life of 4 years, and a residual value of $300.
Determine the total time that the stone is in the air : A stone is thrown horizontally outward from the top of a bridge. The stone is released 19.6 m above the street below. determine the total time that the stone is in the air
What would the breakeven number of dinners : How many dinners per month must Genos serve to break even - geno presently spends nothing on marketing. If Geno spent $30,000 on advertising a year, what would the breakeven number of dinners per month be then
What is the acceleration of the sky diver : A sky diver of mass 81.0 kg jumps from a slow-moving aircraft and reaches a terminal speed of 51.5 m/s. What is the acceleration of the sky diver when her speed is 30.0 m/s

Reviews

Write a Review

Managerial Economics Questions & Answers

  Q what is opportunity cost explain with the help of an

q. what is opportunity cost? explain with the help of an example why assumption of constant opportunity cost is very

  Determine the companies cost of capital

If the market price of common stock of a real estate company is 6 million and the value of its debt is 4 million with a beta of 1.5 and the risk premium on the market is 6 percent and the treasury bill rate is 4 percent

  Which forecast would you have used for 2010 why

Using the forecasts from 2005 through 2009, compare the accuracy of each of the forecasting methods based on the RMSE criterion.

  Analyze the challenges that companies face

Analyze the challenges that companies face in entering global markets. Identify the potential impact to capital budgets in making the decision to move into a global market.

  Creating market graphs and calculating equilibrium

Rochester Metro Area was hit with a major ice storm in 2003. Suppose that before ice storm of 2003, the weekly demand and supply for ice in the Rochester Metro Area were given by following equations:

  Competition in a monopolistically competitive industry

Describe how advertising could increase, and how it could decrease, competition in a monopolistically competitive industry and Why is there probably some rivalry in many monopolistically competitive markets?

  1 discuss how organizational architecture and corporate

1. discuss how organizational architecture and corporate culture are related. use an example of a real-life firm and

  Concept of marginal cost of capital and wacc

After seeing at the project and talking with few people that have been around the management for many years, you recognize that 10 percent cost of capital is not reflective of the firm's current cost of capital.

  Determine the break even point

The company Three, SRL, sells three different products and sets the sales value for every product at 1.5 of their respective variable costs.

  Assume that the industry you wrote about in assignment

Could you please assist with this information. Assume that the industry you wrote about in Assignment 3 wants to expand and has to make some long-term capital budgeting decisions. Now the industry is confronted with government regulations to oversee ..

  Determine economically efficient move

Business Week, in an article dealing with management, wrote, "When he took over furniture factory three years ago. Realized almost immediately that it was throwing away at least $100,000 a year worth of wood scrap.

  Compute the expected rate of return for stock

If the beta of Amazon is 2.2, risk-free rate is 5.5 percent and the market risk premium is 8%, compute the expected rate of return for Amazon stock

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd